Chronic graft versus host disease (GVHD), an autoimmune-like collagen-vascular disease with clinical features similar to scleroderma and systemic lupus erythematosus (SLE), remains the major cause of morbidity and mortality in long-term survivors of allogeneic hematopoietic cell transplantation (HCT). No major improvements in the prevention and treatment of chronic GVHD have been made over the past two decades, due in part to a poor understanding of the pathogenesis of the disease. Our study's long-term goal is to unravel the cellular and molecular mechanisms involved in the development of alloimmunity and autoimmunity in chronic GVHD, and develop novel approaches to prevent and treat chronic GVHD. During the first funding period, we established a new autoimmune-like chronic GVHD model of MHC-matched DBA/2 donors to BALB/c hosts, in which the recipients developed high serum levels of autoantibodies, glomerulonephritis, and scleroderma-like skin damage. The disease is mediated by both donor CD25-CD4+ T effector (Teff) cells and B cells in transplants, but CD25+Foxp3+ Treg cells in transplants prevents or ameliorates the disease in a dose-dependent manner. We also observed that donor Treg expansion was markedly reduced in MHC II-/- and B7H1-/- recipients as well as in wild-type (WT) recipients treated with an IFN-? neutralizing antibody. In contrast, Teff expansion was not reduced in MHC II-/- recipients but was reduced in recipients given MHC II-/- donor APC cells and also reduced in recipients given donor B cell-depleted transplants. Therefore, we hypothesize 1) donor Treg expansion in allogeneic hosts requires interactions with host APCs and parenchymal cells that express MHC II and B7H1 after IFN-? induction; 2) donor APCs, especially donor B cells, are required for the expansion of pathogenic Teff cells in the context of chronic GVHD; 3) host parenchymal cell expression of B7H1 induced by Teff-derived IFN-? not only augments donor Treg expansion, but also directly suppresses Teff expansion via B7H1/PD-1 interactions. To test these hypotheses, we will 1) use newly developed MHCII-/- and B7H1-/- recipients and bone marrow chimeras to test the role of these molecules in expanding Treg cells; 2) use newly developed MHCII-/- donors, luciferase+ donors, and transgenic donors that cannot secrete antibodies but have intact B cell receptors to test the functions of donor APCs, especially B cells, in chronic GVHD; 3) use a novel combination of IFN-?-R-/- and B7H1-/- hosts to explore the interplay between IFN-? and B7H1 in the context of chronic GVHD-induced tissue damage. These studies will provide new insights into mechanisms that regulate donor Teff and Treg activation and expansion in chronic GVHD recipients and lead to the development of novel approaches for preventing and treating chronic GVHD.